Northwestern Mutual was founded as a mutual life insurance company in 1857. Its home office is in Milwaukee, Wisconsin.

Mutual life insurance companies were originally organized to provide insurance-at-cost. Despite that fundamental fact, they have managed to accumulate massive profits over the years by overcharging policyowners for insurance and paying them too little in dividends.

At the beginning of the 21st century numerous mutuals such as Prudential, MetLife, and John Hancock decided to demutualize and return to policyowners all the profits earned over the years. Policyowners were awarded cash, stock and policy credits exceeding $100 billion in these demutualizations, which have been regarded as socially desirable.

Northwestern Mutual is among the few remaining mutual life insurers that has not demutualized. As of December 31, 2005 it had accumulated $10.4 billion in profits from its policyowners under the guise of mutuality and its board of directors has staunchly refused to return that money.

Northwestern Mutual’s whole life policyowners would receive an estimated $8,967 per policy and its other policyowners would receive $1,219 per policy in a demutualization according to financial data contained in Northwestern Mutual’s 2005 Annual Statement to the National Association of Insurance Commissioners (NAIC), the company’s 2005 Annual Report and shown at http://policyownersfordemutualization.blogspot.com.

External links

• Northwestern Mutual Financial Network
• Policyowners for Demutualization of Northwestern Mutual